Anglo American (LSE:AAL,OTCQX:NGLOY) has slashed the value of its De Beers diamond business by US$2.3 billion, cutting the unit’s carrying value in half and pushing the FTSE 100 miner to a US$3.7 billion annual loss as a prolonged slump in the global diamond market deepens.
After previous charges of US$2.6 billion in 2023 and US$2.9 billion in 2024, De Beers is now valued at US$2.3 billion—a fraction of what it was worth just a few years ago.
The impairment drove Anglo to a net loss of US$3.7 billion for the year, compared with a US$3 billion loss previously. Losses at De Beers also widened sharply to US$511 million from just $25 million the year before, as the business recorded a third straight annual drop in production and trimmed its 2026 output forecast.
“There is at the moment a plentiful supply of rough diamonds in the market,” CEO Duncan Wanblad told reporters.
The diamond sector has been squeezed by several forces at once. US tariffs on India, where most rough diamonds are polished, have disrupted trade flows. Competition from lab-grown stones has also intensified, leading to the erosion of pricing power held by market players.
Anglo has been trying to exit diamonds as part of a sweeping restructuring announced after it fended off a £39 billion takeover approach from BHP (ASX:BHP,NYSE:BHP,LSE:BHP) in 2024. The plan includes divesting its diamond, coal, and platinum units and refocusing on copper and iron ore.
Wanblad said the sale of Anglo’s 85 percent stake in De Beers is at an advanced stage, with several credible bidders in the process alongside discussions with Botswana. The country currently owns 15 percent of the business and supplies about 70 percent of its annual rough diamond output.
Wanblad said he is “optimistic” that the company would “see a deal signed” this year.
Despite the hit from De Beers, Anglo’s underlying earnings before interest, tax, depreciation and amortisation rose 2 percent to US$6.4 billion, buoyed by strong copper prices. The company declared a dividend of US$0.23 per share, down from US$0.64 a year earlier, while net debt fell to US$8.6 billion.
Copper and iron ore remain the miner’s core profit drivers and are expected to anchor earnings once the restructuring is complete.
Anglo’s proposed combination with Canada’s Teck Resources (TSX:TECK.A,TECK.B,NYSE:TECK,OTCPL:TCKRF), which would expand its copper portfolio with assets including the Quebrada Blanca mine in Chile, has been approved by shareholders and is awaiting regulatory clearance.
Still, diamonds remain a drag at a time when the broader industry is facing structural change. Producers are currently grappling with falling prices, lab-grown competition, and shifting consumer trends.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.